PROPOSED TENNESSEE PREMIUMS

The Tennessee Department of Commerce and Insurance has approved the proposed premiums that still await federal approval. Access the documents at http://tn.gov/insurance/FFM.shtml.

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The No. 1 question about President Barack Obama’s health-care law is whether consumers will be able to afford the coverage. Now the answer is coming in.

The biggest study yet of premiums posted by states finds that the sticker price for a 21-year-old buying a midrange policy will average about $270 a month. That’s before income-based government tax credits that bring down the cost for many people. For instance, a 21-year-old making $20,000 a year would pay $85 a month, according to the Kaiser Family Foundation Health Calculator, while one making $30,000 would pay $209.

List-price premiums for a 40-year-old buying a midrange plan without qualifying for a tax credit will average close to $330 a month, the study by Avalere Health found. For a 60-year-old, they were nearly double that, at $615 a month.

But the tax credits can dramatically change the actual premiums.

“We believe Tennesseans will be surprised at how affordable coverage can be with a BlueCross BlueShield of Tennessee plan,” said Kelly J. Allen, a spokeswoman for the company. “Based off of feedback we received from our focus group research, we worked hard to offer a broad range of coverage options, with monthly costs as low as $50 to $100 after federal cost savings are received. There are several variables that go into the cost of a plan, so we encourage anyone that does not have insurance to visit our website to learn more about the coverage options.”

Cigna, Humana and Community Health Alliance are also offering individual coverage on the exchange in Tennessee. Dental policies are available as well.

Starting Oct. 1, people who don’t have health-care coverage on their job can go to new online insurance markets to shop for a private plan and find out if they qualify for a tax credit. Come Jan. 1, virtually all Americans will be required to have coverage or face fines. At the same time, insurance companies will no longer be able to turn away people in poor health.

The study points to the emergence of a competitive market, said lead author Caroline Pearson, a vice president of the private data analysis firm. But it’s a market with big price differences among age groups, between states and even within states. A copy was provided to The Associated Press.

The bottom line is mixed: Many consumers will like their new options, particularly if they qualify for a tax credit. But others may have to stretch to afford coverage.

“We are seeing competitive offerings in every market if you buy toward the low end of what’s available,” said Pearson, a vice president of Avalere.

However, for uninsured people who are paying nothing today, “this is still a big cost that they’re expected to fit into their budgets,” Pearson added.

The Obama administration didn’t challenge the study, but Health and Human Services spokeswoman Joanne Peters said consumers will have options that are cheaper than the averages presented.

“We’re consistently seeing that premiums will be lower than expected,” she added. “For the many people that qualify for a tax credit, the cost will be even lower.”

With insurance marketplaces just weeks away from opening, the Avalere study crunched the numbers on premiums filed by insurers in 11 states and Washington, D.C.

Eight of them are planning to run their own insurance markets, while the federal government will run the operation in the remaining four. There were no significant differences in premiums between states running their own markets and federal ones.

The states analyzed were California, Connecticut, Indiana, Maryland, New York, Ohio, Rhode Island, South Dakota, Vermont, Virginia and Washington.

Tennessee has approved and posted proposed premiums, but the U.S. Department of Health and Human Services has yet to give its stamp of approval for plans that will be offered on the federal exchange.

The study looked at premiums for non-smoking 21-year-olds, 40-year-olds and 60-year-olds in each of the 11 states and the District of Columbia.

Bronze plans will have the lowest premiums. But midrange silver plans are considered the benchmark, because the tax credits will be keyed to the cost of the second-lowest-cost silver plan in a local area.